US Open: Mixed sentiments on Wall Street; US500 down 0.5%🗽Spotify surges 10%, Chinese stocks rise

• US stock indices lose on the beginning of the US session; US500 is down 0.5%
• The primary market concern remains the U.S.-China trade war, following the U.S. imposition of 10% tariffs on Chinese goods. In response, China retaliated with 15% tariffs on gas and coal and 10% tariffs on oil and various U.S. products.
• Bond yields are mixed, with 10-year U.S. Treasury yields rising 3 bps to 4.57%, while 2-year yields edge lower. The U.S. dollar trades with mixed sentiment.
• PVH Corp and Illumina shares are under pressure after China signaled that both companies have been added to its Commerce Department's watchlist for potential sanctions.

Investor sentiment at the U.S. market open remains mixed, as traders assess the likelihood of further U.S.-China tensions and their potential impact on hundreds of American companies and overall U.S. business conditions. Meanwhile, Chinese equities extend gains, driven by the tech sector’s expansion and optimism surrounding Chinese AI development. JD.com ADRs lead the surge among Chinese firms. According to U.S. officials, Trump is set to sign an executive order aimed at reaching an agreement and increasing pressure on Iran; however, oil prices and indices showed no immediate reaction to the announcement.

Source: xStation5

Biggest Gainers and Losers

• Top Decliners: Merck (MRK.US), PayPal (PYPL.US), Centene (CEN.US).
• Top Gainers: Palantir (PLTR.US), Spotify (SPOT.US), Ferrari (RACE.US).

US500 (H1 Chart)

Corporate News

• PepsiCo Inc: Missed annual earnings expectations, as U.S. demand for snacks and beverages weakened.
• Pfizer Inc: Beat Wall Street’s Q4 earnings estimates, driven by strong sales of its heart disease drug and a smaller-than-expected decline in COVID vaccine revenue.
• UBS Group: Europe’s largest bank exceeded Q4 profit forecasts, but shares declined following disappointing share buyback plans.
• Apollo Global Management Inc: Q4 earnings exceeded expectations, fueled by strong fee growth and solid performance in the retirement segment. The firm saw $33 billion in capital inflows, pushing assets under management up 15% to $751 billion.
• Estee Lauder Companies: Announced up to 7,000 job cuts as part of a restructuring plan, reporting a 6% sales decline, better than the expected 7.3% drop.
• Merck & Co Inc: Paused shipments of its Gardasil vaccine to China until mid-year due to weakened HPV vaccine demand, but strong sales of its cancer drug Keytruda drove robust Q4 earnings.
• Vodafone Group: Service revenue in Germany declined by 6.4%, weighing on the telecom giant’s performance despite better results in the UK, Turkey, and Africa. Shares are testing historical lows from February 2024.

Spotify (SPOT.US) Update

Spotify Technology (SPOT.US), the music streaming giant, forecasts better-than-expected earnings, supported by user growth, price hikes, and cost-cutting measures. Shares are up nearly 10% today, after first full-year of profitability. The company was actively in cutting costs in recent years, announced that its fourth-quarter revenue surged 16% year-over-year to $4.38 billion vs the €4.16 billion analyst consensus. Despite the strong revenue growth, Spotify's net profit came in at €367 million, falling short of expectations of €407.7 million. But still, it's a significant improvement from the €70 million loss a year earlier.

• Monthly active users (MAUs) increased 12% year-over-year to 675 million, surpassing Spotify’s own forecast of 665 million and exceeding Visible Alpha's estimates.
• Premium subscriptions rose to 263 million, beating projections of 260 million for the quarter.
• Looking ahead, Spotify forecasts Q1 2025 revenue of €4.2 billion, with expectations for: 678 million MAUs and 265 million premium subscribers

Source: xStation5

Key Market Events

• JOLTS data (16:00 EST) expected later today.
• Alphabet (GOOGL.US) and AMD (AMD.US) earnings due post-market.